NSW:No authority for Currawong purchase: ICAC

A senior NSW public servant negotiated a $12.2 million purchase of land despite having no authority to do so, the Independent Commission Against Corruption (ICAC) has been told.

Warwick Watkins, the former chief executive of the Land and Property Management Authority (LPMA), is accused of committing the NSW government to buying the Currawong property, at Pittwater on Sydney's northern beaches, knowing he did not have the legal authority.

It is also alleged former Labor lands minister Tony Kelly sought to authorise the purchase without seeking cabinet approval.

The inquiry is examining an allegation that Mr Kelly backdated a letter to Mr Watkins to February 28 this year, knowing it would be used to falsely represent his authority to purchase the Currawong property.

Counsel assisting the commission, Todd Alexis SC said that on June 17 during a private ICAC hearing, the former NSW premier Kristina Keneally had admitted to being angry at the way Mr Kelly had gone about the transaction On February 25, Ms Keneally wrote to Mr Kelly giving Mr Watkins the authority to hold negotiations with Eco Villages, which had previously bought the Currawong site from Unions NSW.

But in that letter she said there were no additional funds in the budget to make the transaction happen.

Mr Alexis told the commission that Ms Keneally's letter did not authorise Mr Watkins to proceed any further with negotiations and did not authorise him on behalf of the NSW government to exchange contracts with Eco Villages.

The NSW Parliament was formally dissolved on March 4, ahead of the state election on March 26.

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The government was then in caretaker mode, subject to a convention that no contracts should be signed before the election.

"The evidence will show that neither Mr Watkins nor Minister Kelly sought any advice from the Department of Premier and Cabinet about the application of the caretaker conventions before contracts were exchanged," Mr Alexis told the inquiry.

He said that on March 17 the director-general of the Department of Premier and Cabinet, Brendan O'Reilly, scheduled a meeting with Ms Keneally in which he informed her that Mr Watkins had exchanged contracts with Eco Villages.

"She was angered by what Mr O'Reilly had told her," Mr Alexis said.

The inquiry heard that Mr Watkins allegedly telephoned Mr Kelly on March 18, 2011 and asked him to sign the letter which confirmed his authority to enter into negotiations to buy the Currawong site for up to $13 million and execute the contract.

It is alleged that Mr Kelly agreed to provide Mr Watkins with such a letter.

The commission was told that Mr Kelly met Robert Costello, the chief financial officer of the LPMA, at a cafe in Martin Place in Sydney's CBD, where he signed the letter and then backdated it by hand to February 28 - about a fortnight before Mr Watkins executed and exchanged the contracts.

"It must have been intended that the letter would be backdated, otherwise the letter would have made no sense," Mr Alexis said.

Mr O'Reilly notified ICAC about the matter three days later and arranged to have Mr Watkins removed as chief executive of the LPMA with immediate effect.

Mr O'Reilly is due to give evidence to ICAC when the hearing resumes later on Monday.